The plaintiffs in Schumann v. Collier Anethesia were twenty-five former student registered nurse anesthetists (“SRNAs”) enrolled in a master’s program. As part of their academic program, and as required by Florida law, the SRNAs completed a clinical curriculum and participated in a minimum of 550 clinical cases. After completing their unpaid clinical program, the SRNAs brought suit against their college, the corporation with which they completed their clinical work, and individual directors of both. They alleged that through their clinical work they served as “employees” of the defendants for purposes of the FLSA and were entitled to wages and overtime pay.

The district court granted summary judgment for the defendants, finding that the SRNAs were not employees under the FLSA and thus not entitled to minimum wage or overtime. The SRNAs appealed, arguing, in part, that the district court erred by not following the DOL’s six-factor test.

Echoing the Second Circuit in Glatt, the Eleventh Circuit disagreed with the SRNAs and rejected the DOL’s six-factor test. As a threshold matter, the court noted that because the six-factor test is not a regulation it is only due deference “proportional to its power to persuade.” The court “[did] not find it persuasive.” Relying heavily on Glatt, the court characterized the six-factor test as too rigid and posited that “no circuit has accepted it wholesale [nor] deferred to the test’s requirement that ‘all’ factors be met for a trainee not to qualify as an ’employee’ under the FLSA.”

Instead of the DOL’s test, the court endorsed the primary beneficiary test from Glatt, which calls for the evaluation of “a non-exhaustive set of considerations” which are helpful for determining the “primary beneficiary” of an intern’s work. The court then remanded the case to the district court so that it may apply the Glatt factors and permit the parties to supplement the record.

Beyond simply ordering the lower court to apply Glatt, the Eleventh Circuit provided guidance on applying some of its factors. Concerning the duration of internships, the court suggested that “designing an internship is not an exact science” and that “an internship that is longer than absolutely necessary to accomplish the educational and experiential goals of the program does not necessarily weigh in favor of a determination that the intern is an ’employee’.” Instead, the court instructed, “the court should consider whether the duration of the internship is grossly excessive in comparison to the period of beneficial learning.”

Additionally, the court discussed Glatt‘s suggestion that judges evaluate the extent to which an intern’s work displaces the work of paid employees. The court opined that judges should consider how external rules come into play. For example, it found that the fact that Medicare permits one supervising anesthesiologist to work with two SRNAs shed some light on whether the clinical program at issue, which used the same ratio, was exploitative.

The court concluded by cautioning that employee status may not always be an all-or-nothing determination. In the event that an intern does some work that is for his primary benefit and some work that is not, it could be possible to classify him as an intern for some of the work and as an employee for the other.

The Second Circuit’s Glatt decision is persuasive authority in the largely uncharted waters of unpaid internships, and with Schumann its test becomes a more reliable guide for employers with these programs.

Plaintiff David Lola, a contract attorney, conducted document review for Skadden in 2012 and 2013 in connection with a multi-district litigation. Lola alleged that his document review was closely supervised and primarily consisted of:

looking at documents to see what search terms appeared;

categorizing those documents into predetermined categories; and

redacting documents based on specific protocols.

Lola was paid $25 an hour and generally worked between 45 and 50 hours per week. He was classified as exempt under the FLSA and therefore did not not receive overtime pay.

Lola brought suit against Skadden and Tower Legal Staffing, Inc. as putative joint employers, on behalf of himself and similarly situated employees, alleging that he was misclassified as exempt under the FLSA and seeking overtime pay. While attorneys generally qualify for the FLSA’s professional exemption, Lola alleged that he and other contract attorneys performing document review for Skadden were not engaged in the practice of law because they “performed document review under such tight constraints that [they] exercised no legal judgment whatsoever.” The defendants moved to dismiss the complaint, arguing that Lola, as an attorney, was exempt under the FLSA’s professional exemption.

The district court granted the defendants’ motion to dismiss Lola’s complaint. The court first found that the definition of “practice of law” is “primarily a matter of state concern,” and that because Lola resided at all relevant times in North Carolina, that state’s law should apply when analyzing whether he was practicing law under the FLSA. The court then concluded that Lola was engaged in the practice of law under North Carolina law, and therefore an exempt employee under the FLSA. Lola appealed the decision to the Second Circuit.

As a threshold matter, the Second Circuit agreed with the district court that North Carolina law should control the question of whether Lola was practicing law within the meaning of the FLSA’s professional exemption. Constrained to accept the allegations in the complaint as true for purposes of the defendants’ motion to dismiss, however, the Court of Appeals disagreed with the district court’s conclusion that by undertaking the document review he was hired to conduct Lola was necessarily “practicing law” within the meaning of North Carolina law. To the contrary, the Second Circuit found that if all facts pled by Lola are taken as true, and he “provided services that a machine could have provide,” then he was not “practicing law” within the meaning of the FLSA and therefore did not qualify for the professional exemption. For this reason, the Court of Appeals vacated the judgment of the district court dismissing the complaint, and remanded the case for further proceedings.